In October, trading volumes on cryptocurrency exchanges updated the minimum since December 2020. The amount of transactions on the trading floors last month was $543 billion compared to $733 billion in September.
The main reasons
The main factors that influenced the decline in trading volumes include the fall in cryptocurrency prices, as a consequence of the reduced interest in popular and HYIP assets such as NFT and Defi, as well as external factors, primarily the risks of recession in Western economies amid tightening monetary policy (MP) and increased geopolitical tensions this year, explained a leading analyst at 8848 Invest
At the same time, according to the expert, it is impossible to talk about a decline in interest in digital assets. Despite the decreased trading volume of retail players and low interest in social networks and media space, the blockchain technology itself and cryptoprojects are actively financed by funds and institutional players, and are integrated into the classical financial system to improve the scaling of its individual elements.
The trend of the markets has been sideways for 137 days (4.5 months), BitRiver financial analyst Vladislav Antonov reminded. According to him, when the price trades for a long time in a limited range, investors become nervous.
"Statistically, markets are in a sideways trend more than 75% of the time. You have to live with that. Buyer activity remains low amid risk aversion," the specialist explained.
"Is cryptowinter in full swing?
Low trading volumes indicate that the cryptocurrency market is in the "cryptowinter" stage, said the head of AMarkets' analytical department
"Expect price growth and recovery in the short term is definitely not worth it."
The leading analyst of 8848 Invest disagreed with him, who believes that the current situation in the market cannot be called "cryptowinter." Unlike a similar period in 2018-2019, both capitalization and the number of participants are much higher now, and the development of blockchain products does not stop, despite the fall in prices for digital assets.
"The volume of investment in the industry from outside also indicates the normality of the current market situation, and the volatility on certain top assets is quite sufficient to earn even in the current period of time," the expert stressed.
He concluded that trading volumes will grow together with the growth of volatility and the exit of the prices of the largest crypto-assets from the ranges in which they have been since the summer of this year. As soon as market participants understand the direction of further movement - they will connect to it, which will allow trading volumes to grow
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Author: soft4bro.com (03/11/2022)